Real Property Tax

1. Basic Real Property Tax

a) Taxpayer - all persons, natural or juridical owning or administering real
property (land, building, machineries and improvements)
b) Tax Base
i. Provinces - not exceeding 1% of the assessed value of the real property;
ii. Citiies or Municipalities within MMA - not exceeding 2% of the assessed
value of the real property
c) Appraisal and Assessment of Real Property
i. Lands - depending on the actual use of the property
1. Residential - 20%
2. Agricultural - 40%
3. Commercial, Industrial & Mineral - 50%
4. Timberland - 20%
ii. Buildings and Other Structures - assessment level progresses directly
with the FMV
1. Residental - 0-60% from over 175k to 10M
2. Agricultural 0-35% from over 300k to 2M
3. Commercial, Industrial - 30-80% from over 300k to 10M
4. Timberland - 45-70% from over 300k to 2M
iii. Machineries - depends on class
1. Residential - 50%
2. Agricultural - 40%
3. Commercial - 80%
4. Industrial - 80%
iv. Special Classes - depends on actual use for all lands, buildings and
improvements
1. Cultural - 15%
2. Scientific - 15%
 3. Hospital - 15%
4. Local Water Districts - 10%
5. Government-owned and/or controlled corporations (GOCC)
engaged in the supply and distribution of water and/or generation
and transmission of electric power
d) Manner of Computing the RPT
i. Real Property Tax (RPT) = Assessed Value (AV) x Tax Rate (TR)
ii. Assessed Value (AV) = Fair Market Value x Assessment Level
e) Exemptions from the Payment of RPT - to be filed within 30 days from date
of declaration of exemption
i. Real Property owned by the Republic of the Philippines
ii. All lands, buildings and improvements actually, directly and exclusively
for religious, charitable or educational purposes.
iii. All machineries and equipment that are actually, directly and exclusively
used by local water districts and GOCC engaged in the supply and
distribution of water and/or generation and transmission of electric
power.
iv. All real property owned by duly registered cooperatives as provided for
under RA No. 6938.
v. Machinery and equipment used for pollution control and environmental
protection.
f) Collection of RPT
i. Shall accrue on January 1 and paid where the property is located
ii. Can be paid without interest in 4 equal installments
1. March 31
2. June 30
3. September 30
4. December 31
g) Tax Discount for Advance/Prompt Payment
i. 10% discount for prompt payment
ii. 20% discount for advance payment
h) Interest on Unpaid RPT
 i. 2% per month but not to exceed 36 months
ii. Within 30 days after the warrant of levy, city treasurer may advertise
for sale or auction. The advertisement shall be posted at the main
entrance of the City Hall Building and published for 2 weeks in a
newspaper. The advertisement should indicate the amount of
delinquent tax.
iii. The original owner has the right of redemption within one year from
the date of sale in auction.
i) Distribution of Proceeds
i. Province
1. 35% province
2. 40% municipality where the property is located
3. 25% barangay where the property is located
ii. City
1. 70% city
2. 15% Barangay where property is located
3. 15% to accrue equally on all component barangay of the city
iii. Municipalities within MMA
1. 35% MMDA
2. 35% Municipality
3. 15% Barangay where property is located
4. 15% to accrue equally on all component barangay of the city
2. Other Imposition on Real Property
a) Special Education Fund (SEF) Tax
i. 1% of the assessed value of real property
ii. Shall automatically released to local school board to be allocated for the
operation and maintenance of public schools
1. Construction and repair of school buildings
2. Facilities and equipment
3. Education research
4. Purchase of books
 5. Sports development
iii. Distribution of Proceeds
1. Province
a) 50% Provincial School Board
b) 50% Municipal School Board
2. City - 100% City School Board
3. Municipalities within MMA - 100% Municapality School Board
b) Idle Land Tax - 5% of the assessed value of the property
c) Special Levy - not to exceed 60% of the actual cost of project
d) Socialized Housing Tax - more than 50k in value 1/2 of 1% of assessed value
of the land
e) Tax on Transfer of Real Property Ownership
i. Province - 50% of 1% of total consideration or FMV whichever is higher
ii. City - 75% of 1% of toal consideration or FMV whichever is higher
iii. Transfer under CAR Law is exempt
3. Prescriptive Period
a) 5 years collection period from tax due date
b) 10 years collection period in case of fraud
c) Collection period suspended when
i. Local treasurer is legally prevented from collection the tax
ii. Property owner requests for re-investigation and execute a waiver in
writing
iii. Property owner is out of the country or otherwise cannot be located.